E-mail this article

Sending your article

Your article has been sent.

As they watched a Red Sox playoff game a year ago at Fenway Park, Alan Lewis, chief executive of Grand Circle Travel, turned to his younger brother, Hank, and told him he needed money and he needed it fast.

Within days, Hank Lewis, who runs Vantage Travel in Boston, wired $10 million to his sibling. The brothers also made plans to merge their firms into one of the largest businesses catering to senior travelers. The collaboration would mean big cost savings at a time when the travel industry was in freefall.

The gesture earned Hank a note of thanks from his brother, signed “Love and Peace.’’

But brotherly love disintegrated into sibling rivalry between Alan, a major Boston philanthropist who last year gave $10.8 million to Babson College, and Hank, a successful businessman despite past run-ins with the law.

Grand Circle’s takeover of Vantage fell through, the brothers stopped talking, canceled family holidays, and each filed a multimillion dollar lawsuit - with Hank seeking $240 million in damages from his older brother and Alan countersuing for $2 million.

The plight of the Lewis brothers is a cautionary tale about the dangers of mixing business and blood. It adds a striking episode to the recent local history of family business fallouts: media mogul Sumner Redstone and his daughter Shari, of movie chain National Amusements; brothers Roger and Marc Berkowitz of Legal Sea Foods restaurants; and siblings Prestley and Curtis Blake, who founded the Friendly’s ice cream chain. In all of these cases, disagreements over the family business - everything from strategies to succession - unraveled personal relationships and undermined the companies.

“You see these problems over and over,’’ said Ted Clark, executive director of the Northeastern University Center for Family Business. “With family business, there is no opportunity for a clear exit. In a corporation, the sharp knives come out and you can literally end a relationship in a business like way. It’s hard to fire your brother or sever the relationship.’’

The Lewis brothers soon found out the hard way. Hank claims his older brother, once a mentor, took his $10 million and then dragged out the acquisition until Grand Circle no longer needed Vantage’s cash. The delays ultimately turned into a rejection of the planned deal in June, just two weeks after Grand Circle secured a $35 million line of credit from Capital One to help fund operations, according to court records.

Vantage slashed staff and turned over all customer contacts and contracts to Grand Circle in anticipation of the takeover. Hanks says his brother is now using the information to undercut Vantage’s prices.

“I had a lot of faith in his word,’’ Hank, 59, said in a recent interview. “I never thought this would occur. Now, I learned not to trust anybody. Not even your brother.’’

Alan, 61, asserts that his younger brother kept changing the terms of the agreement and demanding more until the deal became untenable.

“I still love my brother. I’ve tried to do anything I could to come up with an amicable settlement,’’ Alan said recently in a phone interview. “It’s sad what’s happened.’’

The brothers weren’t always at loggerheads. The siblings were close growing up, raised mostly by their mother in the Boston area after their parents split. Their father, Edward Lewis, was a convicted bookmaker. Hank later had brushes with the law when he became involved with his father’s illicit activities.

As Hank tried to turn his life around, Alan hired him to work at his company, Trans National Tours, or TNT. But the family’s past came back to haunt them when a TNT business partner, Steve Belkin, tried to buy the Celtics in the early 1980s and Belkin’s ties to Edward and Hank, both convicted bookmakers, became public. Belkin ultimately withdrew his offer for the Celtics and the Lewis family left TNT.

Hank, with a dozen former employees from TNT, started his own venture, Vantage Travel, aimed at upscale travelers over 55. At its peak in 2007, Vantage had more than $215 million in revenues.

Meanwhile, Alan acquired Grand Circle Travel, which offers less expensive packages for older adults. Alan relocated the headquarters from New York to Boston, and with his wife, Harriet, turned the firm into one of the major players in the industry, with about $646 million in revenues in 2008.

The brothers grew wealthy and traveled the world. They bought a cruise ship and shared it between the businesses, and purchased a vacation home together on Purgatory Road in Middletown, R.I. They donated several million dollars in honor of their late father to fund the West End House Boys & Girls Club in Allston. Alan provided millions of dollars in support of educational, cultural, and humanitarian organizations in Boston.

“We were not a well-to-do family growing up and for me, all of this was magical,’’ he said.

So Hank was stunned when Alan asked him for $10 million last fall. Motivated by brotherly love as much as business sense, Hank says, he sent the money and began work on the merger. The siblings signed a letter of intent on Oct. 30 and planned to close the transaction within weeks.

But as the firms began exchanging financial information, Hank said, he learned the cash crunch Grand Circle faced was largely due to the fact that his brother and sister-in-law had taken out $140 million from the company, mostly in the form of customer deposits. Millions of dollars in bonuses were also due to Grand Circle executives. Hank became concerned about the deal and told his brother that he needed to protect the $40 million cash that Vantage would contribute to the combined company.

Hank said that after he raised this issue, his brother stopped returning calls and refused to meet. The annual Thanksgiving dinner at Alan’s house in New Hampshire was called off a few days before the holiday.

Alan, in a phone interview, said he borrowed the money because he “wasn’t as liquid as I needed to be’’ but declined to provide further details. He denied, in court records, accusations about the roughly $140 million in customer deposits. Nonetheless, Alan eventually agreed to turn over $25 million in real estate properties and a $15 million note as collateral for the deal. He offered a deed as a good faith deposit transferring his 50 percent stake of the Rhode Island vacation home.

But as the negotiations dragged into December, Hank said, he learned the values of several properties were grossly overstated and requested additional collateral. Alan, in court records, said Hank agreed to the values and declined to have any appraisals done on the real estate.

While lawyers argued over how to resolve the issue, Alan failed to pay off the $10 million loan by the December 2008 deadline. As the silence stretched into this year, Hank filed a lawsuit against his brother. Within days, Alan repaid the $10 million plus attorney fees. Hank said he finally got his brother on the phone in late January and screamed at him for ruining Vantage, which had scaled back operations, and their relationship.

In a letter dated Feb. 20, Alan wrote to Hank, apologizing for making “a lot of serious mistakes.’’

“I am sorry I have caused you so much pain and hurt. I know you were helping me and my family,’’ the typed letter read. “I love you and would like to begin to patch this up.’’

Despite the conciliatory note, Hank said they have not spoken since the January argument. He said Alan continued to delay and make unreasonable demands, including appointing a group of managers to control of the company if Alan died rather than put Hank in charge.

Harry Melikian, Vantage’s chief financial officer, who has known the two brothers for 20 years, acknowledged Alan’s role as a mentor to Hank over the years. “But this has had a profound effect on Hank. I don’t think they will ever get over this,’’ Melikian said.

Alan said in an interview that he has, in recent weeks, tried to contact Hank through friends, even a rabbi, to reach a settlement.

“I would love to work this out,’’ said Alan, who is countersuing for $2 million, the value of his stake in the vacation house.

But Hank says his offers are insufficient. He is trying to move on with his business - and his life - without his brother. For the first time in years, Hank is hosting an annual fund-raising dinner next month for the West End House Boys & Girls Club without Alan. And with the sibling relationship in limbo, Hank said, he is looking to get rid of the vacation house they share on Purgatory Road.

“It’s like going through a divorce,’’ Hank said. “It’s just bad karma here.’’